Tight Race Expected in Israeli Vote

WITH their champions in the saddle, Israel's two major political parties are girding to do electoral battle at parliamentary polls set for June 23.

This time, Prime Minister Yitzhak Shamir, who easily won the ruling Likud Party's leadership contest last Thursday, faces a new and apparently more formidable opponent at the head of the Labor Party, former Prime Minister and Six-Day-War Army chief Yitzhak Rabin.

The outcome of the vote is still very much an open question, according to political analysts here. With Likud and Labor running neck and neck in opinion polls, and a host of smaller parties vying for the support of interest groups such as new immigrants, the religious, and Israeli Arabs, "a very small number of voters could change everything" says Avraham Diskin, head of the political science department at Jerusalem's Hebrew University.

Though the leading contenders are all familiar figures on the Israeli political scene, this election campaign - Israel's first since 1988 - is shaping up as unusual in one major respect.

Traditionally, Labor has run under the banner of peace, offering a compromise with Palestinians in the occupied territories, while Likud has appealed to conservative, poorer voters on economic grounds. Since 1977, those voters have given Likud four consecutive election victories.

This year, however, with Israel involved in United States-led Middle East peace talks, the Likud "will certainly put at the top of our platform our serious desire and movement toward making peace," Mr. Shamir said in a recent conversation with reporters, although he reiterated his refusal to give up any of the occupied territories in return for peace. Focus on unemployment

The Labor Party, on the other hand, is planning to campaign heavily on social and economic issues, capitalizing on the record unemployment level of 11.6 percent, which has hit veteran Likud supporters especially hard in Israel's development towns.

"This is an election campaign on its head," says Danny Ben Simon, political commentator for the daily Davar newspaper. "Labor lost in the past because it lost contact with its social roots, and concerned itself only with security issues. Now it has made a turnaround, and it has stolen the Likud's thesis."

Mr. Rabin triumphed over his nemesis Shimon Peres, the Labor Party chairman for the past 15 years, in primary elections held last week for the first time in Israeli politics. After an angry campaign he scraped home with just over the 40 percent minimum vote he needed for victory, 6 points clear of Mr. Peres.

His strength at the head of Labor, says Professor Diskin, is that "he is more attractive to right-wing voters," disaffected by the Shamir government's economic policies, but who would not trust Peres to defend Israel's interests vigorously enough in peace talks.

The boost that Rabin's leadership could give Labor in June was illustrated by an opinion survey carried out earlier this month by one of Israel's leading pollsters, Hannoch Smith. He found Likud ahead of Labor by 31.5 percent to 27 percent if Peres was leading the opposition, but Labor beating Likud by 32.5 percent to 28.5 percent with Rabin at the helm.

If the election results are as close as expected, Rabin's leadership of Labor also makes another "national unity" government, joining both the major parties, a much more likely prospect. Peres-Shamir animosity

Such an outcome would have been almost unthinkable with Peres in charge of Labor, and only partly because of his political differences with the Likud leadership. Peres and Shamir do not hide their personal distaste for one another, and Likud as a whole has not forgiven Peres for bringing down the unity government in 1990.

Rabin, however, who publicly denounced Peres's actions during the 1990 coalition crisis as "a stinking maneuver," enjoys more personal credibility among Likud leaders. His tough stance against the Palestinian uprising when he held the defense minister's portfolio in the coalition government also endeared him to Likud.

A national unity government, sharing Cabinet posts between Labor and Likud, and perhaps rotating the premiership between Shamir and Rabin, would free the two parties from negotiating coalition deals with small parties, whether from the extreme right or the ultra-orthodox religious community, which have wielded disproportionate influence over the past two years as their price for keeping Shamir in office.

At the same time, the three ultra-orthodox parties, who currently control 11 of the Knesset's 120 seats, are not expected to fare so well at the next elections, weakened by allegations of corruption, internal divisions, and the influx of 270,000 new voters from the former Soviet Union, most of whom are secular. B How these immigrants - who could control eight Knesset seats if they voted as a bloc - will affect the elections is one of the campaign's major imponderables. Initially seen as natural Likud supporters because of their anticommunist background, more and more of them are turning to Labor in disgust at the government's failure to provide jobs, according to recent opinion polls.

Meanwhile, three small left-wing parties, the Citizens' Rights Movement, Mapam, and Shinui, with 10 Knesset members between them, have banded together for the current campaign to form a "peace front," which they hope will add up to more than the sum of its parts.